U.K. Stocks, Power-Tax Rebates, Bonus Remarks: Compliance

July 7 (Bloomberg) -- Britain’s markets regulator should
investigate whether the closing prices of stocks are being
manipulated, according to lawmakers.

Conservative Mark Garnier pressed for the investigation by
the Financial Conduct Authority at a July 3 hearing of the
Treasury Committee in London.

“This is something which is very widely spoken about among
equity traders,” Garnier said at the hearing. “This is not a
minor thing. This is a big deal.”

David Bailey, head of markets infrastructure and policy at
the FCA, said he was unaware of any investigations into closing
prices and said he’ll report to the committee when he had more
information.

Regulators around the world are grappling with a widening
list of benchmarks that have been, or are claimed to have been,
manipulated by traders at banks for their own profit.

The U.K. regulator, which fined Barclays Plc 26 million
pounds ($44.6 million) in May after finding that a gold trader
had artificially suppressed the metal’s price to cheat a client
in 2012, is also scrutinizing how gold prices are set.

The FCA will join representatives from producers, refiners
and exchanges who have been invited to a meeting of the World
Gold Council this week in London to discuss how to improve the
process.

Compliance Policy

Almunia Leaves Door Open for Recovery of German Power-Tax Aid

Joaquin Almunia, the European Union’s competition
commissioner, kept open the possibility of companies that gained
from previous discounts on German environmental taxes having to
pay back their aid.

Almunia said July 3 he never promised there would be no
repayment of tax rebates for companies that use large amounts of
energy if the rebates are found to be illegal under the bloc’s
state subsidy rules.

The European Commission in December opened a review of the
German discounts on environmental taxes. Heavy energy-users
include ThyssenKrupp AG and Bayer AG.

The amount of recovery, in the event a subsidy is found to
be illegal, is under discussion, Almunia said.

Courts

U.S. House Says Staff ‘Absolutely Immune’ to SEC Subpoena Demand

The U.S. House Ways and Means Committee and a top staff
member say the panel and its employees are “absolutely immune”
from having to comply with subpoenas from a federal regulator in
an insider-trading probe.

The committee July 4 responded to U.S. District Court Judge
Paul Gardephe’s order to explain why it hadn’t complied with the
U.S. Securities and Exchange Commission’s requests for
documents, phone records and testimony of aide Brian Sutter for
more than a year. Gardephe gave the House until July 4 to
answer.

Kerry W. Kircher, the top lawyer for the House, said the
SEC’s request should be dismissed because the information it
seeks concerns legislative activities protected by the
Constitution, which can’t be reviewed by federal judges. If
Gardephe won’t dismiss the SEC’s case, it should be transferred
to federal court in Washington, Kircher said.

Kircher described the document request in a court filing as
“a remarkable fishing expedition” for core legislative
records.

The SEC sought the subpoenas in an investigation testing
the limits of federal insider-trading laws on whether the
committee or staff members illegally passed on non-public
information about a change in U.S. health-care policy.

John Nester, a spokesman for the SEC, declined to comment
on the House’s filing.

The case is SEC v. The Committee on Ways and Means of The
U.S. House of Representatives and Brian Sutter, 14-mc-00193,
U.S. District Court Southern District of New York (Manhattan).

Rengan Rajaratnam Judge Refuses to Dismiss Conspiracy Charge

The judge overseeing Rengan Rajaratnam’s insider-trading
trial denied a defense request to dismiss the last remaining
charge of conspiracy a day after she narrowed the case by
rejecting two fraud counts.

U.S. District Judge Naomi Reice Buchwald in Manhattan said
July 2 at a hearing outside the jury’s presence that the trial
of the younger brother of imprisoned hedge fund manager Raj
Rajaratnam would go forward.

At the end of the government’s direct case July 1, Buchwald
dismissed two securities-fraud counts. The ruling was a victory
for Rengan Rajaratnam, since the top penalty for securities
fraud is 20 years in prison and the maximum sentence for
conspiracy is five years.

Rengan Rajaratnam, who worked his way up through Steven A.
Cohen’s SAC Capital Advisors LP and became a portfolio manager
at Galleon Group LLC, the hedge fund co-founded by his brother
Raj, is accused of conspiring with the brother and two others to
trade illegally in stocks including Advanced Micro Devices Inc.

The government can’t appeal Buchwald’s dismissal of the
fraud counts.

Raj Rajaratnam is serving a 11-year prison term for insider
trading.

The case is U.S. v. Rajaratnam, 13-cr-00211, U.S. District
Court, Southern District of New York (Manhattan).